The Digital Mortgage Truth

The Digital Mortgage truth is much different than the hype.

Minneapolis, MN: It is 2018. The number of people who physically step into a bank or mortgage lender to do a home loan application is dwindling everyday. The vast majority of complete an online loan application on a desktop computer or iPad, or even apply via a Smartphone.

Digital Mortgage

Technology allows lenders to do more parts of the process electronically that ever before, including electronically signing application documents, secure uploading your documents, and even apps that shows the current status of your application 24/7.

Very cool technology, with this process now commonly referred to as a ‘Digital Mortgage’.

I see many places claiming using a digital mortgage will save you a ton of money. Mainly because somehow this streamlines the process, blah blah blah.

Taking the loan application online is only one small part of the mortgage loan process.

You still need to supply W2’s, pay stubs, bank statements, tax returns, etc. We still need processors, underwriters, and a large number of  back office staff.

While yes, we can now get some  of these documents electronically, I haven’t done a single loan yet without needing the client to supply at least s half of these standard supporting documents themselves.

You still need, and still want to have a conversation with a licensed professional Loan Officer to discuss your wants, needs and goals. To analyze your situation, to determine the correct loan for you, to answer any questions, and walk you through the process.

Yes, you can complete a loan application in 10 minutes on your phone, but that is a long long long way from being fully approved and actually successfully closing a mortgage loan.

There is no fast rocket way to circumvent the bulk of the mortgage process. So don’t be fooled or make a lender choice simply because of a gimmicky claim of a digital mortgage process. That just isn’t reality – yet. It is the largest financial transaction of your life. Don’t entrust it to your cell phone.

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Ready to get started?

It’s easy. Simply complete the Online application.  You’ll be applying directly with me, Joe Metzler, an experienced, multiple award winning Loan officer with over 20-years in the the business. We lend in MN, WI, and SD. Learn more about me HERE.

Mortgage lender in MN, WI, SD


Don’t lie on your mortgage application

Minneapolis, MN:  Home mortgage loans are one of the toughest loans you’ll ever apply for. The mortgage industry VERIFIES EVERYTHING. Credit, jobs, income, bank statements, tax returns, first born child, blood samples.  OK, maybe not the last two… But we check just about everything else.

I’ve been taking mortgage applications for over 20-years, and it appears many people treat it like a resume… and feel it is OK to pad information, or leave information out in order to improve their chances of getting approved.

False information on a mortgage application is a federal crime.

You may not think a little white lie, or omission is a big deal, but fraud is fraud, even on a mortgage application. Few, if any people actual read what they sign, but the application does contain the following notice:

The information provided in the application is true and correct as of the date set forth opposite my signature and that any intentional or negligent misinformation of the information contained in the application may result in civil liability, including monetary damages, to any person who may suffer any loss due to the reliance upon any misrepresentations that I have made on the application, and/or criminal penalties including, but not limited to, fine or imprisonment or both under the provisions of Title 18, United States Code, Sec 1001, et seg.

Yikes.

Lenders check everything (twice).

The lending process is paperwork intensive.  We ask people to provide a lot of documents. While the vast majority of people are honest, you may be shocked at the number of forged documents we see.  Prior to the real estate market crash, it was much easier for deceptive people to fool lenders with phony documents, as many of the items people provided were taken for face value, and no additional verification were done.

A common example would be an altered W2 statement, where someone scanned in to the computer, and used PhotoShop or other similar software to change a 3 to an 8, and shows $80,000 a year income instead of $30,000 a year income.  That might have worked in 2006, but it doesn’t work today.

The electronic world we live in, and the tools available, simply will not let you get away with any of that anymore. Written verification of income with your employer, verification of W2’s and tax returns with the IRS. Verification of bank statements with your bank, fraud checks, and better credit reporting all work together to make it virtually impossible to commit this type of fraud.

I recently had a client who had a foreclosure that for some odd reason was not showing on the credit report. So they assumed we would never find out, and didn’t mention it. They also ‘lied’ on the application, as there is a question about having foreclosures. We found out, meaning all they did is was waste my time, the real Estate Agents time, the sellers time, processors, underwriters, and even their own money paying for inspections and appraisals on a house they could never buy.

Don’t fool yourself

You may be able to fool your Loan Officer up front, and get a pre-approval. This is because the initial pre-approval process generally does not encompass all the verification and fraud checks.  Because these items cost money, lenders don’t usually do these additional checks until a home has been picked out, a purchase agreement signed, and the full file goes into actual underwriting.

Home Mortgage Loans in WI, MN, SDNothing worse than to have found the perfect home, given notice to your landlord, packed all your belongings, only to find out the misinformation or omission has been discovered, resulting in a loan denial.

For Real Estate Agents, this is a common reason why a loan may die late in the process.  Because of privacy rules, I generally only say a discrepancy of information has been discovered is the reason for loan denial.

Tell your Loan Officer everything

It may be tempting to fudge the details slightly, or even try straight up fraud. My best advice is to always complete a mortgage loan application with 100% accurate and truthful information, and to always tell your Loan Officer everything. It will be discovered anyway.


Tips for a Smooth Mortgage Application

Tips for a Smooth Mortgage Application

Shopping for a new home can be fun.  Looking at new homes, seeing different style homes, see how others decorate and starting to imagine what the home would look like when you moved it.

Getting a home mortgage loan – not so fun. But you can make it a much easier and smoother process if you start by working with a good Minnesota, Wisconsin, or South Dakota mortgage professional. Quickly followed by being realistic, cooperative and responsive to the paperwork requirements of the loan process.

First step, be realistic. Are you ready to buy a home?  Is your credit OK?  Do you have stable employment?  Do you have some money for down payment?  Assuming YES, the first step is to complete a loan application.

How to Pick A Lender / Loan Officer

Always use a local lender.  There is nothing better online than you can down the street. More often than not, it is actually the other way around. For example, no big internet lender can offers your “local” down payment assistance programs.

Always work with an experienced and fully licensed Loan Officer (read my previous article on learning how to tell the difference).

Mortgage Application Documents

images98725The mortgage application process is cumbersome and paperwork intensive.  Everyone needs to supply basic documents, but depending on your individual situation, you may need more – sometimes a lot more.

Gather and have your basic document ready as listed below. Please do not argue with your Loan Officer. When they call asking for something, it is not them picking on you, it is required. Arguing will get you no place except denied if you don’t supply what is being asked for

Checklist:

  • Photo ID
  • Two most recent pay stubs for each person signing the loan.
  • Last two months bank statements (real statements, not printout or screen shots, all pages)
  • Your most recent 401(k) or other retirement account statement.
  • W2’s (all jobs, last two years)
  • Most recently filed Federal Tax Return (all schedules) State return NOT needed

Common Additional Items

  • Documentation to verify additional income, such as child support, alimony or a pension (recent award letters, and divorce decrees)
  • Last TWO years business and personal federal tax returns if self-employed or own rental property
  • Full copy of bankruptcy papers, including the discharge notice
  • Old Foreclosure? – Need the Sheriff Certificate of Sale (available from the county)
  • Old Short-sale?  Copy of HUD1 Settlement Statement from the actual sale


Prepare for your mortgage loan application

Prepare For Your Mortgage Application
 
St Paul, MN:  A few days ago, I took a loan application  for some first time home buyers. I’d talked multiple times with both the husband and wife leading up to the time of their full sit down application.Following my habit, I’d included a link to my mortgage website in every email to them, along with my other contact info.   I’d also emailed a link to my website page regarding the financial documents required for mortgage application,  then reviewed that list with them in detail prior to their appointment.

I always do this in the hopes that all the steps taken on my part will motivate my clients to do their part.  That they’ll organize, gather the documents needed, and be fully-prepared for our appointment together.  It makes for a far more smooth and quick application appointment and gets us both off to a good start.

Assurances had been received from this couple that “they had it under control”. They’d have all the required documentation in hand for our meeting.

And you know where this is going …

Instead the entire appointment was bogged-down while this couple rummaged through old paperwork and bills, searching for the documents they needed. And of course, they never found.

During the time they were rummaging, both were very distracted, unable to pay attention to what I was saying.  I’m betting, they didn’t retain half of what was said.

As they became more and more rattled, they sniped at one another … and then their comments to me started to take on an “edge” too. As their situation became more overwhelming to them and their frustrations grew, it was clear the appointment needed to end.  Directions were given to E-Mail and fax the remaining info I needed and then the application was over.

Why do I relate this story?

Because so much of the success to be found within mortgage financing, rests upon how well borrowers are prepared for the process. That preparation takes time, no doubt. Takes effort. Takes organization on the applicant’s part.   It demands their attention.

Today’s mortgage application and underwriting process is challenging. But much of the challenge can be overcome by home buyers if they follow the advice I give them.  Both verbally and above.

Taking the time to prepare, get organized, pay attention, make the effort … it all pays off in big ways.   Not least of all in how pleasurable the process of financing ends-up being.

Not do or see to these things?  You WILL encounter problems and big frustrations for sure. You will rob yourself of the enjoyment of buying your home.  And certainly, that’s not what you want.

Avoid that outcome. Right from your first inquiry, call, or contact with your mortgage lender and agent.  Be thoroughly involved.  Be prepared.  Be organized … or get yourself organized.   Follow-up on all requests made of you in a timely fashion.

Do these things and you will feel and be much more in control of the direction your mortgage processing takes, as well as its outcome. You’ll also greatly improve your chances for a more enjoyable mortgage process and home buying experience along the entire way.

Of course, working with a mortgage professional with over 20 years of experience and expertise helps a lot too!